GM's gasoline tax

What got into executives of General Motors Corp. last week? At a news conference in Tokyo, top officials of the world's largest automaker joined the worldwide whine about global warming and said the U.S. should raise gasoline prices by 50¢/gal. The oil industry and gasoline consumers, some of whom drive GM products, should not welcome their observations.

Oct. 27, 1997

4 min read

What got into executives of General Motors Corp. last week?

At a news conference in Tokyo, top officials of the world's largest automaker joined the worldwide whine about global warming and said the U.S. should raise gasoline prices by 50¢/gal. The oil industry and gasoline consumers, some of whom drive GM products, should not welcome their observations.

GM's position on global warming has until now been reasonable. The company acknowledges growth of carbon dioxide levels in the atmosphere, notes scientific uncertainty about consequences of that build-up, and wants to know more about the phenomenon to see whether a response is in order.

At last week's news conference before an auto trade show, GM Chairman Jack Smith stayed on that course when he called the CO2 increase "cause for concern" and noted his company's efforts to develop alternative propulsion technologies. But Louis Hughes, executive vice-president of international operations, said a gasoline tax hike of at least 50¢/gal would do more than technology can.

"This is not an issue that can be solved through some mirrors and a handful of high-tech vehicles that sort of placate everyone into thinking that we've got an instant solution," Reuters quoted him as saying. A spokesman later said GM has long supported a gasoline tax hike as preferable to tougher fuel economy standards but only within that context.

Hughes went on to tie the tax to popular misconceptions about energy use. After noting that Americans lead the world in energy consumption per person, he declared, "That's got to change. We've got to change our habits."

Scolding Americans

Americans just don't deserve this common scolding. They work in a world-scale economy. They inhabit a large country. They support a military that does far more than any other to stabilize the world but that inevitably craves energy. High per-capita energy consumption goes with economic and military leadership and has nothing to do with habits in need of change. GM should know that.

There's nothing wrong about GM, or any other company, drawing its own conclusions about what a CO2 build-up might or might not mean. But companies should not join politicians in steamrolling opposing views on the issue. Contrary to recent claims of the ridiculously alarmist Clinton administration (see related story, p. 36), serious and legitimate doubts exist whether costly responses to global warming anxieties are either warranted or likely to have any effect.

In Tokyo, however, Hughes adopted the administration's tactic of bypassing dissent. "ellipseThere will be global dialogue on a global problem," he said. "That's good, but it means all of us have to sacrifice." So much for dialogue.

And where's the sacrifice for GM? Motorists not buying light trucks and sport utility vehicles because of officially elevated fuel prices will buy sedans instead. The spectacle in Tokyo, then, was of GM counting itself among the converted to the global warming evangel yet calling on others to fill the offering plate.

Another principle gets trampled here. It's a principle that should guide all companies as fevers rise on this issue-and with which GM won't be alone in its disagreement.

Silence on taxes

The best posture for corporations on individual taxes is silence. In a free society, resistance to taxation is essential. Governments by nature tax the governed as heavily as the governed allow. Also by nature, governments try to steer the governed toward officially endorsed behavior. Free people are right, even obliged, to resist both urges of the governments that they necessarily sanction. Corporations should steer clear of the process.

Calls by companies for higher taxes on individuals, especially taxes designed to limit popular choice, thus do not represent shining moments of corporate citizenship. Besides, recommendations by companies that customers surrender growing shares of their money to official treasuries just don't seem like smart business.